Tencent saw its first decline in profit since Q3 2005 in Q2 2018; WeChat MAU 1.06B

Tencent saw its first decline in profit since Q3 2005. WeChat total MAUs grew about 10% to 1,057.7 million. Overall, both QQ and QZone saw a decrease in their MAUs in this quarter.

The first decline in profit since Q3 2005

Tencent’s total revenues were RMB73,675 million (USD11,135 million), an increase of 30% over Q2 2017 (“YoY”), driven primarily by payment-related services, digital content subscriptions and sales, social and others advertising, and smartphone games.

Its operating profit was RMB21,807 million (USD3,296 million), a decrease of 3% YoY. Operating margin decreased to 30% from 40% last year.

Profit for the period was RMB18,580 million (USD2,808 million), an increase of 2% YoY. Net margin decreased to 25% from 32% last year. Profit attributable to equity holders of the Company for the quarter was RMB17,867 million (USD2,700 million), a decrease of 2% YoY. Gaming has a huge impact on that.

Tencent’s Key Activities in Q2 2018

Tencent expanded the capabilities and usage of WeChat Mini-Programs, whose daily active users has exceeded 200 million, by integrating them with other digital tools, such as WeChat Pay, to provide customized solutions for a broader range of verticals.

Tencent has built up a sizable developer ecosystem with a large and expanding base of external developers and software integrators, as well as a consumer base of over 200 million DAUs.

Tencent views WeChat Mini-Programs as complementary to native mobile apps and believes it will contribute materially to their user experience, enterprise relationships, the development of their payment, advertising, and cloud businesses.

During Q2 2018, the total daily pageviews of QQ KanDian and Mobile QQ Browser together increased 55% year-on-year, while the total daily short video views of the two properties combined climbed over 3 times, year-on-year.